Price

The contract price is usually one of the employer's priorities. The lowest price is often the only criterion in public procurement and, for this reason, the contract price frequently becomes a political issue. On the other hand, large construction projects are inherently prone to cost overruns. The contract price determination criteria can be distinguished into economic influences (fixed or variable price), and formation of the ‘total price’, i.e. mainly the content of total price and how the total price is calculated (lump price, re-measurement and cost plus). Employers sometimes want to cap the total contract price using the guaranteed maximum price to allocate all risks of potential price increases to the contractor. This approach is used mainly in the USA using the construction management at risk delivery method.